5 Retailers Who Are Rethinking Brick-and-Mortar in 2021
These brands aren’t just opening new locations but reinventing stores to adapt to retail’s shifting landscape
2020 was a strange year for everyone, and retailers were no exception. Still, some brands and CEOs have been reinvigorated by pandemic challenges and are going into 2021 with a renewed focus on their brick-and-mortar stores.
Even in a year of financial difficulty, many retailers experienced surges in e-commerce sales, curbside pickup, and buy online pickup in store (BOPIS) orders. Now, as vaccines are distributed and emergency measures get slowly lifted, stores are thinking about how to incorporate successes from 2020 into their future business plans and store operations strategies.
Some companies are embracing curbside pickup, while others are converting store space into fulfilment centres. But whether they are opening locations or experimenting with entirely new ones, many retailers are doubling down on the in-store experience and finding new ways to get customers in-store when it’s safe to do so.
Look below to get some inspiration as you plan for the year ahead.
5 Retailers That Are Rethinking How Stores Operate in 2021
1. Adidas Capitalizes on Casual Clothes with New Stores
For many people who worked at home throughout 2020, loungewear became the new office attire. So, athletic brand Adidas was automatically in good standing for a business boost with their widely known leisurewear brand. The company did 4 billion euros in online sales this year, and their third-quarter online sales were up 51 percent compared to the same period last year.
But despite the e-commerce success, Adidas CEO Kasper Rorsted isn’t abandoning brick-and-mortar stores.
“I actually think if you asked most people, there’s a big social element about going out and shopping and just seeing and feeling the products again,” he told CNBC.
The company is taking that into consideration both with their products and their plans for new stores.
“We’ll continue to build stores. We’ll announce that in March of , where we’re going to build and create a great store experience,” he added. “We think the stores are still here to stay, but coupled much closer to the online experience. I think most people are really bored of sitting at home.”
2. Dollar General Goes All-in with New Builds, Renovations, and Relocations
Discount retailer Dollar General provided for customers throughout the pandemic and will continue to expand its essential services in 2021.
The company is planning 1050 new locations, 1750 store renovations, and 100 store relocations this year. Included in those changes are 600 additional locations, which will begin selling fresh produce, while half of the new stores and 75% of the remodeled stores will feature 34 cooler doors.
Dollar General will also go after a different customer base with a new chain called Popshelf that will sell home decor, beauty products, and party supplies to affluent suburban shoppers.
It may seem risky to experiment with store formats now, but Dollar General is coming off of a year that saw the company make $8.2 billion USD in sales, an increase of 17 percent over the previous year. As such, they’ve definitely proved themselves a worthy competitor to traditional grocery stores and hope to continue doing so in 2021.
3. Best Buy Repurposes Stores as Fulfilment Centres
Electronics retailer Best Buy also took a gamble with experimental store formats in late 2020, opening four Minnesota test pilot locations.
In response to the COVID-19 pandemic, Best Buy reorganized stores to devote more space to online order fulfilment and less space to in-store shopping. The retailer reduced the customer-accessible area from 27,000 square feet to about 15,000 square feet, and fewer products were stocked on the sales floor.
Since then, 250 other locations have been turned into hubs for online orders, with an additional 90 converting similarly ahead of the busy holiday season.
In a different pilot, one Best Buy location even experimented with moving its warehouse to an area near a store with a covered drive-through pickup option—that way, goods could easily be exchanged, even in bad weather.
The company has seen how shopping habits changed during the pandemic and reimagined their existing stores to adapt to the new in-store experience that customers want.
4. Costco Continues to Offer More Than Just Products
Membership-only wholesale giant Costco was a go-to for customers looking to stockpile supplies like toilet paper and cleaning products at the beginning of the pandemic and have remained a steady source of essential items (even after imposing customer limits on said toilet paper).
The retailer’s 2020 third-quarter e-commerce sales shot up 82% from the same period in 2019. Still, Costco CEO Craig Jelinek remains intent on providing customers with a good in-store experience by offering value beyond just the products on the shelves, but with affordable add-ons like the restaurant on the way out of the store.
“It’s still important to get people physically in the stores,” he told CNBC. “I still think brick-and-mortar is not going to go away. We want to continue to get people in the stores, and there’s no better way to do it than a $1.50 hot dog and a rotisserie chicken for $4.99.”
The man knows what shoppers need after a massive shopping trip.
5. Publix Goes Big with New Store Prototype
While some retailers are sticking with tried and true methods to please consumers, Publix is launching a giant experiment, literally: the grocery store chain’s latest prototype is a massive store in Tampa.
The 48,000-square-foot store features fresh and dry food products, convenient grab-and-go foods and prepared meals, a deli on the sales floor, a dining area, and even a Publix Aprons Cooking School kiosk.
Perhaps most notably, though, is the inclusion of a permanent area for fulfilling online orders, once again enforcing the idea that grocery pickup will continue long after the pandemic is over.
Although the COVID-19 pandemic has been marked by widespread uncertainty, many retailers have shown that innovation—even in unstable times—can lead to great, prolonged success.
To find out how Foko Retail can help your stores stay connected and focused on the year ahead, book a demo with one of our trusted reps.